The first thing the testers saw was the visibility indicator in the group. They didn't understand what that meant at all.
Then we told them to go to the "reveal contact" section. The onboarding dialog was displayed but they did not understand what it meant.
The creator of the group saw in her "reveal contact" menu that she had one person that was checked and greyed out. She did not know why that was or what it meant.

To put it in a nutshell: This wont work in any way without a very good explanation. If we presume that users don't read manuals at all we can kick the whole feature because it will only confuse the users.